Commodities Plunge on Concerns of Demand, Fed Comments, and Hedge Fund Rumors

Several elements on Wednesday fueled a plunge in prices of many commodities, as the perfect storm of information resulted in big sell offs.

Among the major concerns was the release of the minutes from the latest meeting of the U.S. Federal Reserve, which hinted at the possibility of it slowing down its latest QE or stimulus program before the hiring numbers it was targeting are even close to being met.

It sounds like a deliberate attempt by the Fed to influence the market, as the chances of it stopping its stimulus any time soon is very unlikely at best. Hiring really hasn't moved at all since the introduction of the latest round of QE, so the idea the central bank is going to just slow down or close up shop is pretty ludicrous.

Nonetheless, a somewhat spooked market over responded by punishing commodities across the board. Gold and silver were hit particularly hard by the news, with gold settling down 2.6 percent and silver 2.7 percent. That brought gold to 7-month lows, while silver experienced its sharpest decline in 2 months.

The other ambiguous news was a rumor a commodity hedge fund had to liquidate positions in oil and metals, putting more downward pressure on commodities. As of this writing there is no proof this has even happened. Most of the sell-off in commodities happened between 10 am and 11 am, the time the rumor of the hedge fund sell off was at its peak.

Some analysts look at it all as speculative trading more than anything else. The fact that the majority of the commodities fell on average about 2 percent points to a blip more than a rush out of the sector.

Finally, what has some potential legs one way or the other for commodities is the demand factor, in that regard there continues to be mixed data and outlook concerning the growth rate of the U.S. and global economy, causing ongoing uncertainty in the commodity markets

There is no doubt though that this was a news-related downward push on commodity prices, and shouldn't continue on until there is more clarity over the issues, which outside of the rumored hedge fund, will take time to reveal itself.

Commodity demand and the presumptions the Fed may end easing sometime soon, are things that won't be known for some time, with the ending of stimulus assuredly not going to happen any time soon. Once that's realized, things will level off again until commodity demand is better understood.

Eric Sprott on Why Silver will Outperform Gold

In this video money manager Eric Sprott talks about the reason he believes the price of gold and silver is being suppressed, showing how the supply and demand data don't line up with the current prices of both precious metals.

"Physical demand for gold is out of line with supply. How can all these new people come into this market when there has been no increase in supply . . . for the last 12 years? I would hate to think what happens when we all find out there is no gold in the Treasury."

In other words, central banks around the world appear to be selling gold specifically in order to make up for the shortfalls so the price does't soar.

He also notes that China's gold imports have soared, while the official data show only a four percent increase in the country.

Sprott also tells the reasons he sees silver outperforming gold going forward.

Go here for  video interview with Greg Hunter

How Far Can Gold Prices Rise? $5,000? More?

We are living in extraordinary times in relationship to the price of gold and its correlation to the quantitative easing programs put into play by major economic global players around the world.

So while the idea of gold soaring to price of $5,000, and possibly even to $10,000, while seemingly outrageous for the uninitiated, could in fact become a reality, dependent upon how economies respond to previously failed stimulus measures, and how those nations deal with the growing amount of debt incurred as a result of creating money out of thin air.

A couple of major factors are the debasement of currencies and how high inflation will rise.

Gold prices will largely move on those two factors, especially when the U.S. dollar and other currencies fall in value and are no longer perceived to be places to safely park one's capital.

The major problem with predicting the price of any asset is usually those who understand where things really are, tend to get overly excitable and project prices reaching certain levels dates which are too short in duration. Afterwards, most investors don't believe the probable numbers because of the many failed short-term predictions. But that doesn't mean the underlying assumptions are false, just that the people making the predictions usually are doing so to garner attention to themselves.

That aside, gold will continue to be in a bull market for some time to come, and bubble status hasn't come close to reaching proportions which could actually be identified as such in any meaningful way. The price of gold,, in other words, isn't close to reaching the top yet, and nowhere near enough casual investors have entered into the gold fray yet to allow speculative investing to push the gold prices up. As a matter of fact, we're not even close to that to use the term "bubble" in relationship to gold prices. It will happen someday of course, but is likely to be years away, as well as a much higher price away.

Even those with a much more conservative bent see gold climbing to $2,000 over the next 12 months or so, and possibly as soon as a few months from now, which could be around the early part of 2013.

With the direct connection between the price of gold and creation of money out of thin air, the current practices of open-ended stimulus by the Federal Reserve - the central bank of America - and the lack of effect on helping the economy, all that's really happening is a growing debt load and rising inflation, with nothing positive in return. That is a extraordinarily positive environment for gold, and as well for silver, and both will benefit over the next decade or so, and possibly much longer, depending on the actions of governments and central banks during that time.

The only reason the U.S. dollar hasn't appeared to totally collapse, is other major economic players and their central banks have taken the same actions, which masks the fall in value of the U.S. dollar, because their currencies are also falling. It's more accurate to measure any currency and its value against gold than other currencies, as they're generally simply moving in lock-step with one another because of similar actions taken by central banks, which negates the fall in value of the U.S. dollar.

All of this is to say there is no political desire or will to stop the creation of funny money, and until and if that happens, or is forced to happen, there is absolutely nothing to keep the price of gold to continue on to new heights.

In the end, we're in totally uncharted territory as far as the amount of money being printed, national debt, and amazingly high unfunded liabilities. In the United States alone unfunded liabilities are over $220 trillion (that's not a typo).

But even with these unprecedented numbers, the underlying elements that push the price of gold up are still in place, and because they're increasing in number, as far as money creation goes, and it's only a matter of time before inflation of major proportions set in, gold prices will continue on their upward trajectory, and while it's impossible to know how high it'll go and how long it will take, we're going to continue to see an amazing story unfold concerning gold, and those riding the trend will continue to see their wealth grow with it.

At this time there is no reason to fear a gold bubble, as it's unlikely we're even in the early stages of one. But there will be a time when it arrives, yet even then history has proven the price of gold can soar for some time before it settles back down to earth. We're not close to being there yet, although there will continue to be corrections, which for now must be considered buying opportunities.

So will gold reach $5,000 or even $10,000. It's totally possible, although there is no way to put a time frame on it. All of this will be determined by central bank actions and government policies. Look to Europe to note that governments have little will to implement austerity policies, even though they must if they are to survive. Each government continues to attempt to kick the can down the road and hope it doesn't stop on their watch. One day it will, and gold and those investing in it will wildly benefit from it; even more so than they have in the past in all likelihood.

We are in uncharted territory will central bank money printing and government debt and obligations around the world, that means the price of gold is also in uncharted territory, and all we can do is follow the actions and trust what we know to be the consequences of the practices of these two entities. Nothing will change gold price movements as they relate to the actions of governments and central banks, and how it has responded in the past will continue to be the same in the future until there is in fact a real gold bubble. We're not there yet.

Gold Will Outperform Dow Says Parets

Those who understand currencies and their responses to stimulus measures by central banks, know that it devalues them, as the Federal Reserve has done from its inception in the United States, whereby the U.S. dollar has plummeted over 95 percent in value since 1913.

Inflation is another major factor, which always follows stimulus measures, or as it's called today: quantitative easing.

While those who invest in precious metals like gold and silver know they are the place to be when central banks go crazy with money printing, there is another metric to check for those that may not understand the relationship between gold and the increase of the money supply. And that is the Dow-Gold Ratio, which measures how much it costs gold to buy one share of the Dow.

According to Eagle Bay Capital hedge fund manager J.C. Parets, it is the right time to rediscover this metric, citing the strength of the data since 1999, when the gold bull run began.

At that time it took 44 ounces of gold to acquire 1 share of the Dow Jones Industrial Average. Parets says that in 1980, one ounce of gold would buy 1 share of the DJIA. So from 1980 to 1999, it went from a ration of 1-to-1 to 44.

In 2011 the ration was 6, and at the time of this writing it has risen to 8.

Since 1:1 has been the historic low of the metric, Parets said there is a long way from 8:1 to that low, and believing gold will undoubtedly outperform the Dow, he sees gold to still be a good investment even beyond the obvious impacts of the effect from overstimulating the economy and the resultant price movement of gold.

This is simply another piece of data to use in our arsenal to measure the price movements and probabilities of gold.

Copper, Zinc, Nickel, Tin all Drop

Many commodities took a big hit Friday, as copper, zinc, nickel, tin, gold, silver, platinum and palladium were all trending down, with copper, platinum and palladium taking the biggest hits as measured by percentages, and with platinum and palladium, also falling by the most in U.S. dollars.

Copper has been the major story this month regarding commodities, as it plunged to its lowest levels this week in three months, with falling demand for scrap-metal weighed on the base metal. Most of that is from the slowing demand in China, which has been working on slowing down its heated up economy.

For the last three months, discounts for scrap copper plunged by 25 percent. This is a dramatic turn around from September where copper prices got a boost from the implementation of further stimulus in the United States and Europe.

One of the best leading indicators for copper prices is scrap, and demand has been weakening for the last quarter, even with the bump in copper prices for September.

Copper futures fell to about $3.70 a pound on the Comex in New York for December delivery, at just before 1:30 PM EDT. For the week it is down two percent. Copper futures are trading about 40 cents above No. 2 scrap. That's ten cents above the 30 cents discount it traded at against copper in the 3rd quarter.

Credit Suisse (CS) estimates copper production in 2013 to be at 293,000 metric tons, in contrast to the 102,000 ton shortfall in 2012.

On the London Metal Exchange, copper for December delivery was down to $8,130 a ton ($3.69 a pound), a decline of 1.3 percent.

December Gold Drops Over $10 an Ounce

Some commodity prices were under pressure Tuesday after a report from the International Monetary Fund revealed it slashed global economic growth for the year from 3.5 percent to 3.3 percent.
Gold for December delivery dropped $10.70 an ounce to settle at $1,765. December silver was down 3.2 cents an ounce to $33.985. January platinum fell $3.50 to settle at $1,695.30 an ounce.
Unsurprisingly, the IMF confirmed the leading economies of the world are at risk of recession, although the reality is we've really never emerged from latest recession, and there has been no recovery.
Those commodities moving up on the day included energy, palladium and wheat. Soybeans fell a penny to $15.50 a bushel. Palladium climbed to $658.20, up $1.25 an ounce.

Concerns over supply because of a slowdown in production in the North Sea and rising tensions in the Middle East were behind the rise in energy prices. Recent fires at a refinery in the U.S and another in Russia has also added price support in some energy segments.
Benchmark crude oil futures climbed $3.06, or 3.4 percent, to settle at $92.39 a barrel in New York. That is the highest level in over a week. Brent crude closed at $114.50, jumping $2.68, or 2.4 percent.

Heating oil increased by 5.89 cents to $3.2032 a gallon, and wholesale gasoline was up 6.56 cents to $2.9587 a gallon. Natural gas was up by 6.4 cents to $3.467 per 1,000 cubic feet.

The Dow Jones Industrial Average plunged 110 points to close at 13,473, a loss of 0.8 percent. The S&P 500 Index dropped to 1,441, losing 14 points or just under 1 percent.

The ICE dollar index climbed to 80.023, up from Monday's 79.595.

Gold in Largest Two-Day Drop Since August

For the second day in a row Gold prices fell on Monday, resulting in the biggest two-day drop since August.

The strange idea that a bunch of seasonal, part-time hiring in the latest jobs report, which may have pushed the unemployment rate down to a still hefty 7.8 percent, made some investors feel it will pressure the price of gold down because of a possible stronger economic recovery.

It's ludicrous of course, as not long after the end of December the temporary, part-time workers will be let go, and the unemployment numbers will shoot back up, if not before then.

After falling against the euro to a two-week low, the U.S. dollar finally managed to pull itself up, as some believe a stronger recovery than expected, which would push up the price of the U.S. dollar if it were true.

It isn't of course, but that's the faulty assumption being reported in the press; more than likely in hopes of attempting to make Obama look like he's doing better than he really is with the economy.

With weak earnings expected, it's hard to point to anything really positive about the U.S. economy, other than the probability the housing market may have bottomed out. In that case, even if it hasn't bottomed out, it is probably close to it, although that will have very little impact in the near term on the economy either way.

As long as Ben Bernanke and the Federal Reserve continue to create money out of thin air by acquiring $40 billion a month in mortgage-backed securities, the price of gold and silver, along with other hard assets, will continue to go up over time.

It's likely the Fed won't stop stimulating until unemployment drops below six percent, with some hint from some members of the Fed that it may not stop until it reaches 5.5 percent.

The December contract for gold futures in the U.S. settled at $1,775.70 an ounce, down $5.10, or 0.3 percent. It's up by over 13 percent in 2012 so far, the 12th year in a row it'll finish in positive territory.

For silver, it closed at $33.98 an ounce, down 1.4 percent. It has also dropped significantly over the last couple of days, down over 3 percent during that period.

Platinum closed at $1,689 an ounce, falling 0.9 percent. Palladium ended at $653.47 an ounce, a decline of 0.5 percent.

Gold Prices Today Plummet on South Korea, U.S. Dollar, EU Sovereign Debt

Several market forces are pushing the price of gold down today, as concerns over Ireland's sovereign debt has the euro under pressure, pushing up the value of the U.S. dollar, while pent-up concern over the probably of Asian countries raising their interest rates become a reality, as South Korea was the first to take the action to battle inflation. Most thought China may first take that step.

South Korea raised their interest rates by 25 basis points to 2.50.

The U.S. dollar index rose in response to the weakened euro, gaining $0.79, increasing to $79.14 earlier in the day.

Interest rates became a major concern when China revealed their consumer price index was higher than expected, reaching 4.4 percent, generating speculation they would raise interest rates to combat inflation.

Gold prices will probably remain under pressure until the interest rate scenario plays out, the continual uncertainty surrounding the European Union sovereign debt crisis is handled.

The problem with the European sovereign debt crisis is there appears to be a lot of shady dealings and data still being presented as the condition of some countries, as Greece has again stated their numbers are probably lower than believed concerning their deficits.

Socialism isn't sustainable, and these countries better stop their entitlement programs and mentality before the region becomes an economic graveyard. They're already well on the way.

Once the Ireland situation is taken care of, or at least a bailout is accepted by them, the euro will move stronger against the U.S. dollar, helping gold to rebound again.

But there will still be the interest rate scenario left to play out, which when Asian nations announce they're going to raise them, will cause pressure to again be brought on gold prices in response.

It looks like we're going to end up having opposite economic pressure on gold, which will probably result in a lot of volatility until the narrative is more clear.

Spot gold prices have fallen by over $26 an ounce as of about 2:00 PM EDT.

Gold Prices Soar Past $1,400 Today

Gold prices today moved above $1,400 an ounce, soaring past $1,402, a gain of $8.40 for spot gold.

Even though the U.S. dollar strengthened some today, that hasn't stopped the price of gold from rising, as it has performed that way contrary to the usual inverse relationship between the two, simply because the reasons for the support of rising gold prices overwhelm all other factors at times.

The implementation of another round of printing money will further weaken the U.S. dollar, but at the same time push investors toward investing in gold even more in order to protect against inflation and the loss in value of their capital.

The Federal Reserve's decision to throw another $600 billion into the economy in an attempt to boost the economy will backfire, as the former quantitative easing effort did.

But Ben Bernanke seemingly doesn't care, as there's little else he can do, and evidently doesn't believe in simply sitting still and allowing the market to cleanse and take care of itself.

Gold and gold mining companies, along with other commodities, will continue to rise as a result, and that is good for those investing in raw materials in the months ahead.

Royal Gold (Nasdaq:RGLD), Allied Nevada (AMEX:ANV), Centerra Gold (TSE:CG) Move Up with Fed's Inflating

Royal Gold (Nasdaq:RGLD), Allied Nevada Gold (AMEX:ANV), Centerra Gold (TSE:CG) moved up with the broader gold market in response to the misguided implementation of another round of inflating, or quantitative easing, by the Federal Reserve.

The U.S. dollar plummeted in value as gold prices rose to new record highs today, with spot gold rising to over $1,386 an ounce, an increase of over $37.90.

Royal Gold was trading at $51.46, gaining $1.13, or 2.25 percnet as of 3:31 PM EDT. Allied Nevada was up to $26.82, gaining $1.71, or 6.81 percent. In Toronto, Centerra Gold traded at $19.13, rising $0.25, or 1.32 percent.

The majority of gold miners were up today, some rising as high as 7 percent or more.

Gold Breaks $1,300 Today For First Time, Eases Back

For the first time in history gold hit the $1,300 mark, although it has pulled back some in mid-day trading.

Gold futures broke $1,300 in New York, as the U.S. dollar continues to disintegrate and investors move to protect their capital.

In London bullion traded at an all-time high as well.

The dollar will lose against the euro for the week as the Federal Reserve reiterated they're poised to stimulate the economy once again when needed, even after the wasted $1.7 trillion which miserably failed, although we'll have to still pay it all back.

Gold has broken records in four out of five trading sessions this week, and there's little to stand in the way of that continuing, although there will be corrections along the way.

Gold futures for December delivery rose to $1,300 an ounce on the Comex in New York.

Marc Faber Says Gold Still Cheap

With gold prices breaking several all-time records this week, you would think most would think it's getting expensive to acquire the yellow metal, but not Marc Faber, who says gold bullion prices aren't expensive in his view.

At a CLSA Investors’ Forum 2010 in Hong Kong, Faber said, “Given all the unfunded liabilities and the money printing in the world and the size of the financial assets in the world, I don’t think we are in a bubble.”

While Faber doesn't believe we're in a bubble with gold, he does advise investors to increase their exposure on a monthly basis, and not to increase the percentage of their overall wealth too much into the metal, even as gold prices continue to skyrocket.

He also said there still will be strong corrections at times, a reason he suggest investing on a consistent basis instead of all at once.

Faber said under the right conditions, there could be a pullback as high as 30 percent. He cited the 50 percent drop in gold prices in the 1970s, where prices fell from $195 an ounce to $105 an ounce, although they resumed their upward climb to over $800 an ounce afterwards.

The point he's making is don't attempt to time the gold market.

Goldcorp (NYSE:GG), Barrick (NYSE:ABX), Newmont (NYSE:NEM) and Kinross (NYSE:KGC) All Up on Record Gold Prices

Weak economic news from Europe, confirming the ongoing weak global economy, has shares of Goldcorp (NYSE:GG), Barrick Gold (NYSE:ABX), Newmont Mining (NYSE:NEM) and Kinross Gold (NYSE:KGC) all moving up with the price of gold.

Gold on the New York Mercantile Exchange reached a record high of $1273.40, jumping $25.90 for December delivery.

A weaker U.S. dollar may have contributed a little earlier in the session, but the price movement of gold shows investors aren't buying into the hype that there is an economic recovery.

Mainstream financial news targets every bit of positive for their man Obama, while lightly covering the economic disaster growing under his administration.

Investors and business know the real conditions, and the ongoing weakness confirms we're a long way from any real recovery, and gold will continue its long bull run in response to those realities.

Credit Suisse (NYSE:CS) Downgrades Eldorado (NYSE:CS)

Although Eldorado Gold (NYSE:EGO) has been moving up nicely for some time, it seems part of that movement, over the last couple of months, was the expectation they would end up with Andean Resources (TSE:AND).

Now that they presumably lost that battle to Goldcorp (NYSE:GG), some of the luster has come off the stock, and consequently they were downgraded by Credit Suisse (NYSE:CS) from "Outperform" to "Neutral."

After a slow start in yesterday's session, Eldorado did rebound nicely as the broader upward movement of gold prices helped pull many gold miners with it.

They closed Tuesday at $19.29, gaining $0.19, or 0.99 percent.

Barrick (NYSE:ABX), Newmont (NYSE:NEM), Goldcorp (NYSE:GG) Up on Rising Gold Prices

The gold price today moved up quickly in the morning, and has remained level as the trading day goes on, with major gold miners Barrick Gold (NYSE:ABX), Newmont Mining (NYSE:NEM) and Goldcorp (NYSE:GG) moving up with them, as investors continue to seek safety in the midst of economic weakness and uncertainty.

Spot gold was up $11.20, bringing the price to $1,247.60 an ounce as of 2:39 PM EDT. Gold prices are starting to move downward slightly now, although remaining flat after the huge jump in the morning.

Barrick Gold was at $46.95, gaining $0.61, or 1.32 percent at 2:40 PM EDT. Goldcorp reached $44.40, an increase of $0.67, or 1.53 percent, as of 2:41 PM EDT. Newmont Mining was up the most of the three, reaching $61.27, up $1.35, or 2.25 percent.

Out of control government spending which has done little, if anything, for the economy, and continued bad news from most parts of the economy have investors scrambling to gold to protect their capital, while at the same time enjoying decent returns.

Eldorado (NYSE:EGO), Barrick (NYSE:ABX), Goldcorp (NYSE:GG) Soar as Investors Flock to Gold

The realization we've never left the recession is starting to be realized by a growing number of investors, and gold miners like Eldorado Gold Corp. (NYSE:EGO), Barrick Gold (NYSE:ABX) and Goldcorp (NYSE:GG) are soaring today as gold prices continue their upward march with investors seeking safety.

Gold prices are approaching two-month highs, up to $1,240, a gain of $10.20, as of 1:15 PM EDT.

Continuing bad news concerning the economy is the major reason for the resumption in gold prices surging upward. As the stimulus money leaves the system the underlying weakness is again in the face of investors who see it did nothing but hide the economic disaster, rather than do anything to help.

And calls for more stimulus have people extremely worried as economic report after economic report, including the plunge in sales of previously-owned homes plunging, and a record low in sales of new homes, which plunged to an annual rate of 276,600, along with a 12.4 percent decline in July.

A report from the Commerce Department also revealed orders for durable goods failed to meet expectations, indicating continued weakness in the manufacturing sector.

Gold prices today show the future pattern, and gold mining companies will be the beneficiaries of this strong move as the disaster the economy really is becomes to be understood more fully by investors, who will increasingly use gold investments as a safe haven.

Goldcorp (NYSE:GG), Novagold (NYSE:NG), IAMGOLD (NYSE:IAG) Down as Gold Prices Level

Gold prices dropped slightly Monday, with gold miners like Goldcorp (NYSE:GG), Novagold (NYSE:NG), IAMGOLD (NYSE:IAG) falling disportionately with them, along with many other miners.

Gold for December delivery on Monday fell 30 cents to $1,228.50 an ounce at the Comex division of the New York Mercantile Exchange. Volume was light on the day. Spot gold dropped $1 dollar also in the session.

Goldcorp ended the trading day at $41.09, falling $0.80, or 1.91 percent.

Iamgold finished at $17.68, losing $0.41, or 2.27 percent.

Novagold closed at $6.58, down $0.21, or 3.09 percent.

Much of this came from temporary euphoria over mergers and acquisitions interest, which provided a temporary burst of optimism to the markets, but which is already starting to be discounted as limited in scope and in no way will expand to numerous companies.

Gold will probably continue to take a breather before taking off in the next couple of weeks, depending on the economic data coming out, which continues to be very weak.

Barrick (NYSE:ABX) Chairman Sees Gold Prices Going Higher

Citing the weak economic conditions, Barrick Gold Corp. (NYSE:ABX) Peter Munk said gold prices have a better chance of going higher than falling in the future.

Munk added that he sees no reason for the company to hedge at this time, as it's not likely there'll be major declines in gold prices because of the instability in the global economy, which pushes up rather than lowers the value of gold.

Even in healthy economic conditions gold tends to move upward in the fall season, add the deteriorating global economy and in the near term there will be a big push for gold, which while eventually leveling off, will continue on an upward trajectory for some time to come.

The countries and central banks around the world have for the most part made every wrong decision they could have to battle the ongoing recession, and even though they're saying the possibility of a double dip could happen, the reality is outrageous amounts of money spent on stimulus plans only masked and hid the recession, it did nothing to change it, as the results obviously reveal.

Already the Federal Reserve has stated they're ready to begin "quantitative easing" again (print money, buy Treasuries), and that will play into the increased value of gold as investors flock to it to protect their assets.

Barrick (NYSE:ABX), Goldcorp (NYSE:GG), Newmont (NYSE:NEM), Agnico-Eagle (AEM) All Up as Gold Rebounds

After starting off slow in earlier in the trading session, gold prices today advanced in the afternoon, pulling the share prices of major gold miners like Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG), Newmont Mining (NYSE:NEM) and Agnico-Eagle (AEM) up with it.

The story for gold prices at this time is the revelation the American and global economy isn't even close to being robust and in a recovery as asserted in the not too distant past, which has not only added support under gold, but has aided it in continuing its inevitable long-term upward climb in price.

All the major gold miners listed above had gains of 2 percent or better as of about 3:10 PM EDT in New York. Trading volume was below the 3-month average for all of them though, especially with Newmont Mining and Barrick Gold.

After the stimulus had been lowered and/or removed, the economy has been seen to be as naked as it really has been all along, and continued spending can't and won't change that.

But that won't keep the Treasury and Federal Reserve from continuing to take steps which over the long term will devastate the economy, but will be a reason to invest in gold for a long time to come.

Investors Flee to Gold For Safety as Economy is in Shambles

Very few people seem willing to admit the U.S. and global economy is under extreme pressure. Investors know it though, and fled to gold as a safe haven today, pushing gold futures up to their highest level in eight weeks.

The words "unexpected" continue to come from economic writers concerning jobless claims rising, Europe not being as strong as asserted, and China's production falling.

Even today economic writers use terms like the "recovery is slowing," as if there ever really was an economic recovery.

Jobless claims climbed to a five-month high today, while industrial production in Europe and China both fell. In the case of China, it plummeted to an 11-month low.

This doesn't include the horrid sovereign debt crisis of Europe, which is being ignored or covered up by the mainstream press, who seem to believe a few turns of the knob over and everything was magically turned around.

Governments and the press seem to be attempting to hold up the global economy by wishful thinking and Disney-like hopes and dreams, rather than the harsh realities that should be brought out into the open so it can be understood and prepared for by people.

The fact that the Federal Reserve "changed it mind" concerning dropping its monetary stimulus points to the real condition of the economy. They committed to doing whatever it takes to deal with the weak economic conditions recently, again revealing there are extreme concerns about what is really happening.

Gold investors should rejoice, as the Treasury and Federal Reserve can't help themselves. They're going to continue to print money and buy U.S. debt in efforts to artificially prop up the economy.

What don't they get about it not working in the recent past? How much they going spend? Two trillion this time?

Either way, they are going to do the very predictable, and we can count on that. That means gold prices are going to take off again, as they have today.